With regard to the tax treatment of spouses, under the income tax code married couples have the option of joint assessment, separate assessment or of being assessed as two single people. Under joint assessment, either spouse can be nominated as the assessable person. Where they avail of this option they are entitled to double the allowances and rate bands available to a single person. The combined allowances can be allocated between the spouses on the basis of their instructions to the tax office. In a case where only one of the spouses is in paid employment, the facility for joint assessment is of significant benefit as the couple's total tax allowances can be allocated to the employed spouse.
The primary reason why married women who work may be taxed at a high rate on low earnings is that in these cases most of the couples' income tax personal allowances are being used by their husbands. In this case, the wife avails of only the PAYE allowance, which was standard rated and increased to £1,000 in the 1999 budget.
Deputies should, however, be aware that regardless of whether one or both spouses are in employment, the combined tax bill of all married couples will generally fall by over £10 per week as a result of the major tax chances announced in the budget. Nevertheless, the changes in standard rating of allowances and widening of the tax bands announced in the budget may leave one spouse with greater allowances and the other spouse with lesser allowances. However, the information leaflet issued recently by the Revenue Commissioners with the tax-free allowance certificates specifically points this out and invites married taxpayers who wish to change the way in which the allowances are allocated between them to complete the attached form or contact their local tax office.